How to use resale certificates in Pennsylvania

When buying personal tangible property in Pennsylvania for resale, the Department of Revenue (DOR) requires that an official resale certificate accompany the sale.

This certificate allows purchasers to buy products tax-free and then collect the tax when reselling them. Whether you use the certificates to purchase products or accept them from your customers, you’ll need to understand the rules.

How to use or accept a Pennsylvania resale certificate

If a customer wants to make a tax-free purchase, they must provide the seller with a valid resale certificate. The certificate can be an original form or photocopied, and the following requirements must be met.

  • It must be properly completed.
  • The certificate must be in the hands of the seller within 60 days of the sale. If the seller is audited and doesn’t have certificates for some sales, they could be held accountable for the sales tax in those instances.
  • You cannot present or accept a certificate if you know it contains false information.
  • The form must be used to purchase products that will be resold in their original form or as a component or ingredient of other property.
  • The seller must keep the certificate for four years after the date of the sale.
  • If the purchaser does not have a Pennsylvania sales tax license number, they must complete item number seven of the form explaining why the number isn’t necessary in their case.
  • If the buyer makes multiple purchases from the seller, they can check the blanket provision box and use the certificate for a series of purchases.

The penalties for misuse of a resale certificate

Pennsylvania takes the misuse of resale certificates by both buyers and sellers very seriously. The law allows anyone making false or fraudulent statements on the certificate to be convicted of a misdemeanor, which could result in a year in jail, a maximum fine of $1,000, or both.

The Pennsylvania DOR makes using resale certificates pretty straightforward. If you have any questions about the use of the forms, check out their online publication or get in touch with them by calling 717-787-1064.

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